Documents & Reports

Thailand - Renewable energy acceleration program (English)

Abstract

Major new investment in generating capacity will be needed to satisfy Thailands rapid economic growth. As of 2008, installed capacity was 29.1GW. The latest power development plan (2008-2021) forecasts an annual growth rate in demand of 5 percent over... See More +Major new investment in generating capacity will be needed to satisfy Thailands rapid economic growth. As of 2008, installed capacity was 29.1GW. The latest power development plan (2008-2021) forecasts an annual growth rate in demand of 5 percent over the next decade. To meet this, an additional generation capacity of 30.2GW will be needed by 2021. Despite the governments alternative energy development plan, most of the increased power capacity is expected to come from gas-fired and coal-fired generation. In 2006, the Government of Thailand created incentives for private sector investment in renewable energy, setting a supplementary feed-in tariff or adder for each renewable energy technology. The size and term of the adder varies by technology. Investments in solar power have failed to take-off due to the lack of experience in this sector and because the adder tariff, though significant, is only for 10 years and provides insufficient marginal project returns for the risk assumed in these early solar investments. In this context, International Finance Corporation (IFC) has used funding from the Clean Technology Fund (CTF) to support two investments in order to catalyze the development of private sector solar projects by establishing a track record of performance for future investors and developers, and provide demonstrational information that concessional financing can address some of the regulatory risk.
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